ECO 4933 Engineering Economics Practice Problems
Problem 1
If you make the following series of deposits at an interest rate of 10% compounded annually, what
would be the total balance at the end of 10 years?
A.
$ F = 22,256
B.
$ F = 24,481 *
C.
$ F = 24,881
D.
$ F = 25,981
Problem 2
To withdraw the following $ 1,000 payment series in the figure, determine the minimum deposit (P) you
should make now if your deposits earn an interest rate of 10 % compounded annually. Note that you are
making another deposit at the end of year 7 in the amount of $ 500. With the minimum deposit P, your
balance at the end of year 10 should be 0.
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Problem 3
What is the future worth of an equal quarterly payment series of $2,500 for 10 years if interest rate is 9%
compounded monthly?
Problem 4
A couple is planning to finance their 5yearold daughter's college education. They were able establish a
college fund that earns 8% compounded annually. What annual deposit must be made from the daughter`s
5th birthday to her 16th birthday to meet the future college expenses shown in the following figure.
Assume that today is her 5th birthday.
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 Fall '09
 Staff
 Depreciation, Net Present Value, B. False

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